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In a brief filed recently, Owners’ Counsel of America and the National Federation of Independent Business Small Business Legal Center call upon the Texas Supreme Court to uphold the award of just compensation to an owner for the taking of billboards in eminent domain.

OCA joined the NFIB as amici in this case because the question before the Texas Supreme Court requires the Court to consider fundamental principles applicable in all eminent domain cases where property valuation is at issue.

This case involves the condemnation of two parcels of land along Interstate 10 leased by Clear Channel Outdoor for its billboards. The state exercised its power of eminent domain to take land, but refused to condemn and pay for the billboards located on the land.

At the center of the litigation are two questions: whether the billboards are improvements to the property and must be paid for, and whether the government should compensate an owner for structures removed or damaged when the government condemns the underlying land for a public project. The trial court concluded that the billboards are not moveable personal property but rather affixed to the land, and that the State should have condemned and paid just compensation to the owner.

The brief filed by OCA and NFIB argues that billboards are not designed to be moved and that the most valuable part of a billboard is not the materials from which it it is made, but rather its ability to generate income. In view of this reality, the brief stresses two points. First, the trial court and the Court of Appeals both correctly concluded that the State must compensate the owner when it orders a billboard removed if the billboard was previously affixed to the ground, or if removal results in damage or destruction of the billboard. Second, the “income capitalization approach,” which takes into account the billboard’s ability to generate income, is required by the Just Compensation Clause of the federal and Texas constitutions, which require the "full and perfect equivalent" of the property taken. In those circumstances, just compensation owed the owner must account for future income.

“As a baseline principle of federal law, the government cannot avoid its obligation to pay compensation under the Fifth Amendment when it invades, destroys, or physically appropriates private property, which it certainly did here” explained Robert H. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu. Thomas, the Hawaii member of OCA, worked with NFIB attorney Luke Wake in drafting the brief.

“OCA joined the NFIB as amici in this case because the question before the Texas Supreme Court requires the Court to consider fundamental principles applicable in all eminent domain cases where property valuation is at issue,” Thomas said. “This issue is of concern not only to commercial billboard owners in Texas, but all property owners in the state and nationwide.”

The Texas Supreme Court will hear oral argument on September 17, 2014.

ABOUT OWNERS' COUNSEL OF AMERICA:

The Owners’ Counsel of America (OCA) is a nationwide network of experienced eminent domain attorneys dedicated to protecting the rights of private property owners large and small, locally and nationally, and to advancing the cause of property rights. The lawyers affiliated with OCA are in private practice in nearly every state and represent private owners against federal, state, and local governments, utilities, transportation and redevelopment authorities and other entities that may be armed with eminent domain power. For more information or to locate a condemnation lawyer in your state, please visit http://www.ownerscounsel.com.